CLO ETF Showdown: JAAA vs CLOI After VanEck’s Fee Cut

JAAA is still the cheaper CLO ETF to hold. VanEck cut CLOI’s expense ratio from 0.36% to 0.29% on October 7, 2026, but Janus Henderson’s JAAA charges 0.20%, a $9-a-year gap per $10,000. CLOI pays more (a 4.91% SEC yield on October 9 versus JAAA’s 4.52% on September 30) because only 46% of it is rated AAA. You are paying for credit risk, not a better fee.

Key takeaways

• CLOI’s fee fell to 0.29% on October 7, 2026, its second cut in about a year.
• JAAA still costs 0.20%: $20 a year on $10,000, against CLOI’s $29.
• JAAA holds $32.29 billion; CLOI holds $1.72 billion (both as of October 9, 2026).

What changed in the CLO ETF market this week?

VanEck cut the total expense ratio on the VanEck CLO ETF (CLOI) from 0.36% to 0.29%, effective October 7, 2026. That makes CLOI cheaper than it was, but it is still 9 basis points more expensive than the category leader, the Janus Henderson AAA CLO ETF (JAAA), at 0.20%.

The VanEck press release calls this the fund’s second fee reduction in the last year. CLOI is actively managed by MetLife Investment Management and buys investment-grade tranches of collateralized loan obligations (CLOs).

Fee cuts in a niche this small are a tell. Issuers cut prices when they are losing the asset race, and CLOI is losing it badly. JAAA is roughly 19 times its size.

Why CLOs matter right now

CLO tranches pay floating coupons. That matters after the Fed raised its target range by a quarter point to 3.75%–4.00% on September 16, 2026, according to the FOMC statement. Floating coupons reset higher when short rates rise.

Janus Henderson lists JAAA’s effective duration at 0.01 years as of October 8, 2026. In plain terms, a rate hike barely touches the price. The risk you carry is credit, not duration.

Is JAAA or CLOI the cheaper CLO ETF to hold?

JAAA is cheaper. Its 0.20% expense ratio, which the fund lists as both gross and net under a waiver running through at least February 28, 2027, beats CLOI’s new 0.29%. On fees alone, JAAA wins by 9 basis points. It also wins on size, holdings count and track record.

Metric	JAAA (Janus Henderson)	CLOI (VanEck)
Expense ratio	0.20%	0.29% (was 0.36% until Oct. 7, 2026)
Net assets	$32.29B (Oct. 9, 2026)	$1.72B (Oct. 9, 2026)
30-day SEC yield	4.52% (Sept. 30, 2026)	4.91% (Oct. 9, 2026)
Distribution yield	4.85%, 12-month (Oct. 1, 2026)	4.70% (Oct. 9, 2026)
Credit mandate	At least 80% AAA-rated CLOs	Investment-grade tranches; 46.19% AAA (Sept. 30, 2026)
Holdings	631 (Oct. 8, 2026)	184 (Oct. 8, 2026)
1-year NAV return	4.68% (Sept. 30, 2026)	5.10% (Sept. 30, 2026)
Inception	October 2020	June 21, 2022

One caveat on the yields: the two SEC figures carry different dates, so treat the gap as approximate. VanEck’s page also notes that CLOI’s SEC yield reflects temporary fee waivers and would have been lower without them.

How much does the fee gap cost you in dollars?

Very little. On a $10,000 position, JAAA costs $20 a year and CLOI now costs $29, so the gap is $9. Before the cut CLOI cost $36. VanEck’s move saved CLOI holders $7 per $10,000, but the fee is not what separates these two funds.

The arithmetic

• JAAA: $10,000 × 0.20% = $20 a year
• CLOI after October 7: $10,000 × 0.29% = $29 a year
• CLOI before October 7: $10,000 × 0.36% = $36 a year
• Fee gap today: $29 − $20 = $9 a year, or $90 a year on $100,000
• SEC yield gap: 4.91% − 4.52% = 0.39 points, about $39 a year on $10,000 (dates differ, see above)

The yield gap is more than four times the fee gap. SEC yields are already net of expenses, so CLOI’s extra income is not an illusion created by the fee. It comes from somewhere else: lower-rated paper.

Why does CLOI yield more than JAAA?

CLOI yields more because it owns less AAA paper. VanEck reports 46.19% of CLOI in AAA tranches, 25.69% in AA and 11.76% in A as of September 30, 2026. JAAA’s prospectus mandate requires at least 80% in AAA-rated CLOs. The extra yield is a credit-risk premium.

That premium has paid off over the past year. CLOI’s NAV returned 5.10% in the 12 months to September 30, 2026, matching its J.P. Morgan CLO IG benchmark. JAAA’s NAV returned 4.68%, behind the 4.87% of its J.P. Morgan CLO AAA benchmark.

The skeptical read

A 42-basis-point win in a calm credit year proves little. Lower tranches absorb losses first when loan defaults climb, and a 12-month window that excludes a credit scare tells you nothing about how AA and A paper trades in one.

Size is the other weak spot. At $1.72 billion and 184 holdings, CLOI is a fraction of JAAA’s $32.29 billion and 631 holdings. Smaller funds in thinly traded asset classes usually carry wider bid-ask spreads, which can erase a year of fee savings on a single round trip.

Is a CLO ETF worth it over T-bills in 2026?

For a taxable account, the pickup is thinner than headline yields suggest. The Fed’s H.15 release puts the three-month Treasury bill at 4.05% on October 8, 2026. JAAA’s 4.52% SEC yield beats that by 47 basis points, about $47 a year per $10,000, before state taxes.

Treasury bill interest is exempt from state and local income tax. CLO income is not. In a high-tax state, a good part of that 47-point pickup disappears. We ran the same logic on cash products in our T-bill ETF vs money market fund comparison.

JAAA also lists a yield to worst of 5.36% as of October 8, 2026. That figure describes the portfolio’s contractual yield and runs ahead of the SEC yield. It is not a return forecast.

Which CLO ETF fits which investor?

JAAA fits investors who want a cash-like sleeve with a small yield pickup and the lowest credit risk in the category. CLOI fits investors who already hold cash elsewhere and will accept AA and A tranches for roughly 39 more basis points of income. Neither is a substitute for an FDIC-insured account.

Investor profile	Better fit	Why
Parking cash for 6–24 months in a taxable account	T-bills or a T-bill ETF	4.05% three-month bill yield, state-tax exempt
Core floating-rate sleeve, lowest cost	JAAA	0.20% fee, at least 80% AAA, $32.29B in assets
Income-focused, accepts more credit risk	CLOI	4.91% SEC yield, 46.19% AAA
IRA or 401(k) bond sleeve	JAAA or CLOI	State-tax drag on CLO income does not apply inside the account
Trader making frequent round trips	JAAA	Far larger fund, typically tighter trading

If duration is the question rather than credit, our TLT vs SGOV breakdown covers the other end of the curve. For another VanEck fixed-income fee cut, see our look at emerging markets bond ETF fees.

How does a Fed move change the CLO ETF math?

Both funds hold floating-rate tranches, so their income tracks short-term rates. If the Fed raises again, coupons reset higher for both. If it cuts, both yields fall. Rate moves do not change which fund is cheaper. They change how much income each produces.

The effective fed funds rate was 3.88% on October 8, 2026, per the Fed’s H.15 release. The 10-year Treasury sat at 5.22% the same day. With long yields that high, some income investors will weigh locking in duration rather than floating. That trade-off is real, and CLOs do not solve it.

What to watch next

Three dated events could shift the CLO ETF comparison in the next two months. Each one moves short rates or credit sentiment, and both drive what these funds pay.

• October 14, 2026: September CPI, per the BLS release calendar. A hot print raises odds of another hike and higher floating coupons.
• October 27–28, 2026: FOMC meeting. The decision lands October 28.
• December 8–9, 2026: FOMC meeting with a new Summary of Economic Projections.
• February 28, 2027: the earliest date JAAA’s contractual expense waiver can lapse. Watch the next prospectus for any change to the 0.20% net fee.

FAQ

What is the cheapest AAA CLO ETF between JAAA and CLOI?

JAAA, at a 0.20% expense ratio. CLOI charges 0.29% after VanEck’s October 7, 2026 cut, and only 46.19% of CLOI was rated AAA as of September 30, 2026.

How much did VanEck cut the CLOI fee?

By 7 basis points, from 0.36% to 0.29%, effective October 7, 2026. VanEck says it is the fund’s second fee reduction in about a year.

Do CLO ETFs lose value when the Fed raises rates?

Not much from rates alone. JAAA’s effective duration was 0.01 years on October 8, 2026, because CLO coupons float. The bigger price risk is credit: wider spreads or rising loan defaults.

Is CLO ETF income taxed like Treasury interest?

No. Treasury bill interest is exempt from state and local income tax. CLO ETF distributions are generally taxed as ordinary income at both federal and state level, which shrinks the after-tax pickup over T-bills.

Why did CLOI beat JAAA over the past year?

Its lower-rated AA and A tranches pay wider spreads. CLOI’s NAV returned 5.10% versus JAAA’s 4.68% in the year to September 30, 2026. That extra return is compensation for extra credit risk.

How big are JAAA and CLOI?

JAAA held $32.29 billion and CLOI held $1.72 billion in net assets as of October 9, 2026, according to each issuer’s fund page.

The bottom line

VanEck’s cut narrows the gap, but JAAA remains the cheaper, larger and higher-rated CLO ETF. The $9-a-year fee difference per $10,000 is noise. The real choice is credit: JAAA’s 80%-plus AAA floor versus CLOI’s 46% AAA mix and roughly 39 basis points of extra yield.

If you want a floating-rate sleeve that behaves closest to cash, JAAA wins on every measurable attribute except yield. If you want more income and accept that AA and A tranches take losses before AAA ones, CLOI is now a cheaper way to own that risk than it was a week ago. In a taxable account, compare both against T-bills after state tax before choosing either.

This article is journalism, not investment advice. Do your own research before investing.

Sources

• VanEck: VanEck Reduces CLO ETF (CLOI) Management Fee to 0.29% (Business Wire, October 2026)
• VanEck CLO ETF (CLOI) fund page
• Janus Henderson AAA CLO ETF (JAAA) fund page
• ETF Strategy: Janus Henderson launches active AAA CLO ETF (October 2020)
• Federal Reserve: FOMC statement, September 16, 2026
• Federal Reserve H.15 Selected Interest Rates
• Federal Reserve: FOMC meeting calendar
• BLS: October 2026 release schedule

Wealth Engine researches and drafts with AI tools and checks every figure against the sources above. How we report.